Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Data concerning China's soybean imports during the month of October continue to show that China is relying on Brazil for almost all of its soybean imports.
Customs officials in China reported that during the month of October, China imported 6.53 million tons of soybeans from Brazil compared to 3.38 million tons for October of 2017. This represented approximately 95% of all of China's soybean imports during the month. The remaining 5% of soybean imports during the month of October were from the United States (66,900 tons), Uruguay (127,600 tons), Argentina (33,200 tons), and Russia (92,800 tons).
If you put these amounts in terms of the number of vessels of soybeans, the comparison is even more revealing. If you assume that a vessel holds 60,000 tons of soybeans, during the month of October, Brazil exported to China 109 vessels of soybeans, the United States exported 1 vessel, Uruguay exported 2 vessels, Argentina exported 0.5 vessels, and Russia exported 1.5 vessels.
During October of 2017, China imported 1.33 million tons of soybeans from the United States, but that declined to just 66,900 tons this past October. The reason of course is the trade dispute between the United States and China.
In the anticipation of limited purchases of U.S. soybeans, China ramped up its soybean purchases from Brazil over the past few months in order to build stocks while they wait for the start of the 2018/19 soybean harvest in Brazil. As a result, it is reported that China had record amounts of soybeans on hand in October as well as ample supplies of soybean meal.
In a more normal economic environment, China generally switches from Brazilian soybeans to U.S. soybeans at this time of the year and then they switch back to Brazilian soybeans in February and March when Brazil ramps up its soybean exports. This is not a normal year and it looks ever more likely that China will not purchase any more soybeans from the U.S. in late 2018 and early 2019. That could change of course if the two countries resolve their trade dispute.
Brazil has been the beneficiary of this trade dispute and it is estimated that Brazil's soybean exports could total 80 million tons in 2018 for the first time.
Source: Soybean&Corn Advisor